Weekly technical outlook - Gold, USD/JPY, EUR/USD [Video]

Gold builds a base on geopolitical optimism but remains below key bullish breakout levels
USDJPY trades cautiously around 159 ahead of US PCE and amid uncertainty over US-Iran relations
EURUSD rebounds above 1.1600, though bullish momentum still lacks confirmation

Christina Parthenidou XM

Geopolitics → Gold

The week opened with a renewed risk-on tone across global markets after comments from President Trump and Secretary of State Marco Rubio increased optimism for a potential agreement to reopen the Strait of Hormuz. However, unresolved issues surrounding Iran’s nuclear activity and US sanctions against Tehran suggest that a comprehensive resolution may still be distant.

Improving geopolitical sentiment weighed on oil prices and limited gains in the US dollar, helping gold tick higher amid thin liquidity conditions, as US markets are closed for Whit Monday.

From a technical perspective, the precious metal remains in a corrective phase despite finding support above the 200-day simple moving average (SMA). Buyers still need a decisive break above the 20-day and 50-day SMAs, as well as the 4,700-4,780 region, to confirm a meaningful bullish reversal and invalidate the downtrend that has been in place since mid-April.

Treasury market volatility driven by Fed commentary and upcoming US macro data could be another market catalyst for notable price actions this week.

US core PCE → USD/JPY

Attention turns to Thursday’s US core PCE inflation report, where consensus expectations point to another increase to 3.3% y/y. The release could provide the next directional catalyst for USDJPY, which continues to consolidate near its 50-day SMA around 158.75.

Friday’s Tokyo CPI data from Japan may carry additional significance, particularly after national CPI prints arrived weaker than expected. Softer domestic inflation data in Japan could weaken expectations for aggressive BoJ tightening and place renewed pressure on the yen. Even so, upside momentum in USDJPY may remain constrained near the 159–160 region due to persistent intervention risks from Japanese authorities and the possibility of supportive geopolitical headlines weighing on the dollar. Markets continue to price in more than three BoJ rate hikes by year-end, compared to only one Fed rate cut.

Technically, the pair remains range-bound in the short term. Immediate resistance is seen around 160.30, while a sustained break below 158.75 could expose the 157.85 support zone. Failure to stabilize there may accelerate bearish momentum.

Regional European CPI → EUR/USD

EURUSD may stay sensitive to geopolitical headlines, while Friday’s regional European flash CPI releases could become a key driver for euro positioning. Risk-on sentiment helped the pair crawl back above 1.1600 on Monday following last week’s sharp decline, with buying interest emerging near a critical support region.

Still, the broader technical structure remains fragile. The bulls need a sustained move above 1.1750 to confirm a stronger bullish continuation and invalidate the bearish trend structure that has dominated since mid-April.

The momentum indicators continue to lean cautiously bearish, while the 1.1550 support area remains critical for near-term direction. A break below that level could increase downside pressure toward 1.1500 and potentially deeper retracement levels thereafter.

Author

Christina Parthenidou

Christina joined the XM investment research department in May 2017. She holds a master degree in Economics and Business from the Erasmus University Rotterdam with a specialization in International economics.

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